We are sharing an article by Federico Rodríguez, director of our Energy and Infrastructure Group, published in the UC Innovation Center’s magazine, on the regulatory challenges for the deployment of green hydrogen in Chile.
Chile has done what we might call a remarkable job of promoting its National Green Hydrogen Strategy (H2V)¹ to the world. On paper, we are the future global leaders. But those of us who work on the day-to-day operations of the permitting process know that, when we try to translate that strategy into the reality on the ground, we often hit a wall. It is not a problem of technology or a lack of vision; the problem is regulatory.
In our experience advising on projects—of this and other types—in the region, I’ve identified a frustrating pattern: outdated planning instruments that fail to keep pace with the rapid and sustainable growth of cities; public property burdened by overlapping rights—mining concessions, onerous use concessions, easements, among others; and, most seriously, a government administration that seems unable to reach consensus. While the Ministry of Energy urges us to move faster, the Ministries of Health and Housing often slow progress with outdated classifications. They fragment the projects: they treat solar panels as clean energy, but view the ammonia plant with the same suspicion as a factory with smoking chimneys.
Here, Mejillones stands out as a case study in green hydrogen. The choice of Mejillones is no random gamble. This bay has an industrial character at its core, making it the natural candidate to lead the energy transition. Not only does it boast exceptional solar radiation just a few kilometers away; it possesses something far more difficult to replicate: critical enabling infrastructure. We’re talking about established ports with export capacity, an existing industrial base with thermoelectric plants undergoing conversion, and—crucially—immediate proximity to the large mining deposits in the north, which are set to be the first consumers (offtakers) of this new industry. On paper, it’s the perfect logistical and commercial ecosystem. However, its current land-use planning acts more like a straitjacket than a launchpad.
Mejillones today serves as a barometer for measuring this regulatory fever. In this article, we do not wish to remain in the realm of theory. The idea is to contrast what is happening with a hypothetical project model that seeks territorial efficiency in protected areas, in light of the recent approval of the Volta project. We will conduct a comparative analysis of how two green hydrogen projects located in the same development hub—Mejillones—are treated unequally despite having land-use and production plans that are not very different. Given the scope of this essay, the focus will be solely and exclusively on the land-use regulations—or urban planning regulations, if you will—of the Mejillones area.
The comparison drawn here is revealing and offers lessons for urban planning authorities: today, a project’s success does not depend on its engineering, but rather on the interpretive gymnastics we perform to define whether we fall under “energy” or “industry.”
The Problem with the Planning Instrument: the PRIBCA
To understand the problem, we must examine the rules of the game. The territorial arbiter in the bay is the Antofagasta Intermunicipal Coastal Zone Regulatory Plan (PRIBCA), an instrument whose original design has yet to align with a modern industrial vision.
Its logic is binary: it divides the territory into watertight compartments. On the one hand, it defines zones such as the Landscape Protection Zone (ZPIP), where it allows “energy infrastructure” but strictly prohibits “productive activity” (factories). On the other hand, for example, in the Conditional Industrial Expansion Zone, only productive activities are permitted.
The problem is that green hydrogen and its derivatives do not respect this boundary. A green ammonia plant is, at the same time, both energy storage and a chemical process. By applying anachronistic regulatory paradigms, the instrument erroneously equates what constitutes energy storage infrastructure with a conventional industrial activity.
As we will see below, these problems have had to be resolved through regulatory interpretations by the authority—the Urban Development Directorate of the Ministry of Housing and Urban Planning (DDU)—which are often confusing and subject to change.
The Paradox of DDU 470: Progress in the Fine Print
One of the key contradictions arising from the PRIBCA is as follows: while electricity generation and electrolyzers are already recognized as infrastructure, the production of their derivatives (green ammonia) remains trapped within the rigid framework of the manufacturing industry.
The Ministry of Housing and Urban Development attempted to address this with Circular DDU 470 of 2022. It was a step forward, yes, but with fine print. The document recognized that H2V plants are “energy infrastructure,” but explicitly stated that if hydrogen is used to produce another substance—such as ammonia—the facility becomes a “productive activity” (industry).
This administrative definition is critical for territorial efficiency and the development of the industry. Much of the best land for solar projects in Mejillones falls within the PRIBCA’s Landscape Protection Zones (ZPIP). These zones allow for the installation of solar panels and electrolyzers (“infrastructure”), but strictly prohibit “industry”—that is, the production of ammonia.
The result is absurd: a comprehensive project is effectively crippled by regulations. We can generate electricity and H2 molecules on-site, but we cannot convert them into exportable ammonia right there, because the regulation classifies it as a nuisance factory rather than energy storage.
The interpretive shift the DDU had to make for the Volta project
The most compelling evidence of this legal uncertainty is not theoretical; it is factual. One need only look at the file for the recently approved Volta project (RCA No. 202502001229)² to see how the authorities had to change the land-use planning rules midway through the evaluation process to save the investment.
In April 2024, the SEREMI MINVU of the Antofagasta Region rejected the hydrogen component of the project³. The reason? Because it was classified as “energy infrastructure” (under DDU 470), it was incompatible with the Productive Activities Zone (ZAP) where they wanted to set up operations—a zone that, paradoxically, prohibits energy infrastructure. It was utter nonsense: hydrogen didn’t fit in the industrial zone because it was “energy,” but it also didn’t fit in the protected rural zone because it was part of an industrial process.
But in May 2025, we witnessed a major shift in interpretation. The same authority issued a new favorable official letter⁴ that reversed the logic: it argued that, since the final product is (industrial) ammonia, hydrogen production is “subsumed” under industrial activity. By labeling the entire package as “industry,” the project was able to fit within the ZAP zoning.
This about-face leaves a bitter lesson: the legal classification of the molecule depends on what suits the map. What saved the Volta project in terms of land use (classifying everything as “industry”) is precisely the death knell for projects seeking to locate in ZPIP zones, where the “industry” label will trigger an automatic ban.
The Sound Judgment of DDU 522 on Batteries: A Correct Approach
The recent Circular DDU 522 (March 2025) on batteries (BESS) offers a solution to this problem.
Here, MINVU applied common sense: it ruled that stand-alone battery projects are “energy infrastructure” and not industry, even if they involve electrochemical processes. The argument is systemic: the “end result of the process” remains energy for the system.
Article written by:
Federico Rodríguez | Energy and Infrastructure Group Director | frodriguezm@az.cl
